Darden Restaurants, Inc. (NYSE:DRI) has announced the preliminary results of today’s shareholder vote on whether to replace all of its board members. The victory has gone to Starboard Value, as shareholders apparently took the advice of Glass Lewis and Institutional Shareholder Services.
Starboard wins control of Darden board
Today’s proxy vote brings in all 12 of Starboard’s board nominees: Betsy S. Atkins, Margaret Shân Atkins, Jean M. Birch, Bradley D. Blum, Peter A. Feld, James P. Fogarty, Cynthia T. Jamison, William H. Lenehan, Lionel L. Nowell, III, Jeffrey C. Smith, Charles M. Sonsteby, and Alan N. Stillman.
Starboard CEO Jeffrey Smith said in a statement this morning, “Darden’s future is bright. The new Board is prepared and excited to immediately begin working alongside Darden’s management team to put Darden on track for long-term value creation for all shareholders.”
On Thursday, an expert told ValueWalk that replacing all 12 of Darden’s board members would be a very drastic move. He said that for Glass Lewis and ISS to recommend doing that meant that both firms felt the previous board could not be fixed. The fact that shareholders agreed says a lot about just how bad things may have gotten at Darden Restaurants.
Darden board seeks to create value
In addition to the usual focuses involved in creating value for shareholders, Smith also said they plan to maintain and strengthen Darden Restaurants’ investment-grade rating and dividend. They also want to emphasize a culture that’s centered on restaurants, operations and people.
“Darden has all the right ingredients to regain the strength and prominence it once enjoyed,” Smith added. “The new Board is incredibly excited by the opportunity at hand. We look forward to continuing our hard work from inside the boardroom and working with management on a shared goal of excellence for Darden.”
Other votes at Darden’s annual meeting
In addition to electing all of Starboard’s board nominees, Darden also announced that shareholders approved the company’s plans for executive compensation “on an advisory basis.” They also approved the appointment of KPMG LLP as the restaurant operator’s independent registered public accounting for the fiscal year that ends May 31, 2015 and an amendment to the bylaws that grants proxy access.
Shareholders denied two shareholder proposals as well.